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The textile and apparel (TA) trade between China and Australia was investigated by calculating trade indices, based on an overview of status quo. The paper used Revealed Comparative Advantage (RCA) method to analyze TA trade advantage between China and Australia. Then, factors that affect China’s TA exports to Australia were analyzed in terms of demand effect, structural effect, and competitiveness effect. The results show that the concentration of Australia’s TA imports from China was high, due to the low competitiveness of its TA goods. Thus Australia’s demand matches China’s exports well. An empirical analysis suggests that signing a China-Australia Free Trade Agreement (FTA) will increase China’s TA exports to Australia, boost China’s domestic production and promote employment. Keywords—apparel trade; Free Trade Agreement; trade relationship

A RCA Analysis of China's Competitive Advantage to Export Textile and Apparel to Australia